ByDominique Soguel, CorrespondentMay 15, 2015

Haitham Ahmed works in the BMW service workshop he owns in Tripoli. Business has been tough as Ahmed was taken by surprise in the 2011 revolution and is struggling to make a profits like many others in the oil-rich country's tiny private sector.

Tripoli, Libya — When Haitham Ahmed wants to let off steam, he hops in a BMW M5 and “drifts” at high speed, contagious laughter drowning out the roar of his engine, panicked drivers scrambling to get out of his way as he tears through the back streets of Tripoli.

This is one variation of the water-cooler break in Libya, a war-torn nation at risk of economic collapse. Drifting – the art of maintaining control of your car while oversteering between sharp turns – has become a popular pastime for men in the absence of other sources of entertainment.

Business “has been disgustingly tough,” says Mr. Ahmed, a tall, slender entrepreneur donning the signature blue coveralls of a mechanic. “We have a big drop in the economy. Most of the businesses here are just trying to survive. If the business covers its own expenses, without the owner’s salary, he is very happy.”

Ahmed, who runs a BMW servicing business, considers himself lucky because he can cover expenses and eke out a small profit. But overall, the difficulties he faces and the steady decline his business has experienced echo the wider story of Libya’s struggling economy.

When he and his partner, Allaeddin Dabbashi, launched in December 2012, they had 22 employees. They are now down to six, so the owners have had no choice but to pick up the slack.

“Physically, I am finished. I didn’t shave for a month now because I have no time,” says Ahmed, a Libyan and Sudanese dual-citizen, whose work shift can drag out to 16 hours, from 9 a.m. to 1 a.m.

It was not supposed to be this way.

“Before the revolution, Libya was one of the best places to make money,” he recalls. The absence of competition in the post-sales market and the high demand for luxury cars made a BMW service shop a lucrative business when Muammar Qaddafi ruled Libya.

“To be honest, we thought we were going to make a lot of money from Qaddafi and his people,” says Ahmed, but that day never came.

People who could leave, left

The oil and public sectors have long dominated the Libyan economy at the expense of the private sector. Poor governance, cronyism, and a lack of competitiveness and qualified labor made it difficult for local entrepreneurs to emerge and find foreign investors. But 2010 had brought a hint of reform: new laws on commerce, customs, income tax, and labor.

The 2011 overthrow of Qaddafi came as a surprise, but the partners decided to push on with their plans after the conflict ended.

“My hopes were 50-50. In the beginning there was a lot of cash and everybody was happy,” says Ahmed, who studied business administration in Malta. “A lot of foreigners were here. Not just European expats, [but] Arabs and Africans, people who want to work.”

But day by day, the situation got worse, the foreigners who had the means to do so left, and the country slipped back into wider conflict in 2014. Two rival governments – one based in the eastern city of Tobruk, and an Islamist-leaning administration in Tripoli – are now waging a complex struggle for legitimacy and control over the oil sector.

Chronic insecurity, random checkpoints, and periodic fuel shortages mean getting to work at the BMW shopis a challenge – even on the best of days. The workshop is in a neighborhood that was at the heart of heavy fighting last year between militias vying for control of the capital. The second floor still shows the scars of that battle.

Making replica spare parts

“Since we opened, we haven’t had one smooth month because there is always a crisis,” laments Mr. Dabbashi, who studied mechanical engineering and business finance in England.

Libya’s economy has been in recession since mid-2013 as a result of the fighting and disruptions in the oil sector. The nation’s GDP has shrunk by half: from $82 billion in 2012 to $41.2 billion in 2014. Income per capita dropped from $12,800 in 2012 to $6,600 in 2014, the World Bank reported in March.

Mirroring the economic situation in Libya, the numbers at the BMW workshop paint an alarming picture. Back in 2012-13, profits were averaging up to $24,000 per month. In 2014, when their business was shut for weeks at a time, they barely covered running costs. Now they are lucky to make $5,000 in a month, seeing on average 5 to 6 clients per day.

“Security is the number one problem,” says Dabbashi. “Lots of people are not driving their cars anymore. The customers we have now are the ones whose cars are un-drivable and unsellable. The segment of the population that drives such (high-end) cars is abroad. The foreign companies have all left.”

Their biggest headache at the moment is securing labor and the delivery of spare parts, with fighting affecting ports of entry and shipments getting stuck in countries like Jordan and Tunisia. Ahmed now makes replicas of the parts they need from scratch, while Dabbashi used his last trip to London to bring vital bits and bobs in his suitcase.

Keeping enemies apart

Planning has become next to impossible.

“Right now it is about survival. You can’t take a nap in this country. If you take a nap you miss the whole situation,” jokes Dabbashi.

Ahmed, whose darker complexion can be a problem in a country where racist attitudes are rampant, was arbitrarily detained twice last year by young gunmen who only let him go because he had the right contacts.

But juggling a client and friendship base that bridges the divides of the conflict is itself a source of stress. He makes sure enemies don’t cross paths at the shop.

“Everyone is afraid and no one wants change anymore,” says Ahmed, who sent his pregnant wife to Khartoum because it is safer. Most of the staff have left the country too.

If the conflict drags on till the end of the year, the partners may simply close up shop. “Since Qaddafi left, nothing good happened,” he says, “so we made a mistake.”